[For Information Purpose Only
The Japanese language press release should be referred to as the original.]
October 25, 2019
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities Code: 8963)
Asset Manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Performance Update for September 2019
Invincible Investment Corporation (“INV”) hereby announces its monthly performance.
1. Overall Performance of the Entire Portfolio
The overall Portfolio NOI1,2 for December 2019 fiscal period (from July to September) decreasedby 3.9% compared to the same period in 2018. The decline in NOI for September 2019 (-1.1%)
stems from several issues affecting the Japan hotel and tourism market, including (i) the
prolonged trade and diplomatic dispute between Japan and South Korea resulting in fewer
inbound travelers from South Korea and (ii) several typhoons in September which impacted
travel demand. Guests from South Korea only represented 3.3% of INV’s total hotel room
revenue3 for January-June 2019, but declined to 0.9% in September 2019. The decline inguests from South Korea is in line with the September 2019 figures announced by Japan
National Tourism Organization (JNTO), showing a 58.1% decline in visitor arrivals from South
Korea to Japan year-on-year. This could have had an adverse effect on the entire hotelindustry in Japan whereby hotel operators that are heavily dependent on South Korean guests
had to cut rates to maintain occupancy.
NOI of hotels in the Hokkaido area increased by 339.5% in September 2019, mainly as a resultof the recovery from the sharp drop in sales following a big earthquake that hit the area in
September 2018.
The following are the details by segment.

This English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

12. Hotel Assets Overview(1) Domestic Hotels
The domestic hotel portfolio4 performance for the month of September 2019 has shown an
increase in Occupancy of 1.8pt, and declines in ADR and RevPAR of 4.2% and 2.2% yearon-year, respectively, due to the reasons mentioned above. The September 2019 NOI
declined by 3.5% year-on-year, and the cumulative NOI for the December 2019 fiscal period(July to September) declined by 5.4% compared to the same period last year.
Table below shows the KPIs for each area of the domestic hotel portfolio.
Pre-offering (55 properties5)
Area

Post-offering (71 properties4)

Occupancy

ADR

RevPAR Occupancy

ADR

RevPAR

Rate8(JPY)9(JPY)10(JPY)9(JPY)10

Rate8

Tokyo 23 Wards

90.5%

8,129

7,354

90.3%

7,919

7,151

Greater Tokyo (ex. Tokyo 23 Wards)

90.9%

12,447

11,30990.9%

12,193

11,089

Chubu

84.9%

8,347

7,088

87.6%

9,358

8,201

Kansai

81.4%

7,493

6,103

81.4%

7,493

6,103

Kyushu

88.2%

8,103

7,150

86.5%

9,225

7,977

Hokkaido

85.3%

12,456

10,61987.6%

12,386

10,854

Other domestic

93.5%

18,184

16,994

90.6%

16,171

14,658

Total

88.4%

9,904

8,755

88.4%

10,072

8,899(2) Cayman Hotels
The Cayman Hotels (the Westin Grand Cayman Seven Mile Beach & Spa and Sunshine
Suites Resort) continue to perform well year-to-date, however experienced some weakness
in September, which is the slowest month of the year. ADR increased by 2.3%, Occupancy
declined by 10.5pt, and RevPAR decreased by 18.1%. We believe the comparatively poor
year-on-year performance mainly reflects the positive impact a 2018 hurricane in the eastern
Caribbean had on the hotel performance by creating excess tourism demand in the Cayman
Islands for this month last year.
The NOI (direct ownership basis, hereafter the same) for the month of September 2019
increased by 62.3% year-on-year (which is included in the calculation of the overall Portfolio
NOI for July 2019 as stated in “1. Overall Performance of the Entire Portfolio” on page 1)
mainly due to decreases in one-off expenses in relation to the hotel transfer in September
2018. The cumulative NOI for the December 2019 fiscal period (July to September)increased by 9.4% compared to the same period last year.
3. Residential Assets Overview
The residential portfolio6 in-place occupancy rate as of the end of September 2019 was 96.6%,
a year-on-year increase of 0.3 pt. The rent increase program continues to show positive results
as the average in-place rent per tsubo as of the end of September 2019 increased by 0.8% yearThis English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

2

over-year. NOI7 for the residential portfolio in September 2019 increased by 1.8% year-onyear, and increased by 1.0% on a cumulative basis for the December 2019 fiscal period (July to
September).
Rents, compared with those based on the immediately preceding leases, increased by 0.6%
across all new leases, 1.3% across all renewal leases, and 1.0% across all combined new andrenewal leases for the December 2019 fiscal period.
INV achieved a rent increase on 39.0% of lease contract renewals (December 2019 fiscal
period). The retention rate for the existing tenants continues to be high at 83.0% for the
December 2019 fiscal period.
4. Performance(1) 55 Domestic Hotel Properties5

Occupancy Rate8

Sept.
2019
(A)
88.4%

Sept.
2018
(B)
88.0%

ADR (JPY)99,904

RevPAR (JPY)10Gross Revenue(JPY million)11

Cumulative (July-Sept.)
2018
YoY
(C－D)
(D)
Change91.0%-0.8pt
-0.9%

(A－B)

YoY
Change+0.4pt

+0.4%

2019
(C)
90.2%

10,482

-578

-5.5%

10,923

11,352

-429

-3.8%

8,755

9,228

-473

-5.1%

9,854

10,333

-479

-4.6%

4,242

4,380

-138

-3.2%

13,852

14,457

-604

-4.2%

(A－B)

YoY
Change+1.8pt

+2.1%

2019
(C)
90.1%

(2) 71 Domestic Hotel Properties4
Cumulative (July-Sept.)
2018
YoY
(C－D)
(D)
Change90.4%-0.3pt-0.3%

Occupancy Rate8

Sept.
2019
(A)
88.4%

Sept.
2018
(B)
86.5%

ADR (JPY)9

10,072

10,516

-444

-4.2%

11,398

11,726

-327

-2.8%

RevPAR (JPY)10Gross Revenue(JPY million)11

8,899

9,098

-199

-2.2%

10,271

10,599

-328

-3.1%

5,294

5,295

-1

-0.0%

17,73618,124

-387

-2.1%

Sept.
2019
(A)
42.1%

Sept.
2018
(B)
52.6%

(A－B)

YoY
Change-10.5pt-20.0%ADR (USD)9

196

192

+4

+2.3%

263

237

+26

+10.9%

RevPAR (USD)10

83

101

-18

-18.1%

178

174

+4

+2.4%

Gross Revenue(USD thousand)

2,527

3,008

-480

-16.0%

14,894

15,117

-223

-1.5%

(3) Cayman Hotels

Occupancy Rate8

Cumulative (July-Sept.)
2019
2018
YoY
(C－D)
(C)
(D)
Change67.8%
73.4%-5.7pt-7.7%This English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

3(4) 62 Residential Properties6

Occupancy Rate
Rent per Tsubo
(JPY)

Sept.
2019
(A)
96.6%

Sept.
2018
(B)
96.2%

9,392

9,317

(A－B)

YoY
Change+0.3pt

+0.3%

2019
(C)
96.5%

+75

+0.8%

9,380

Cumulative (July-Sept.)
2018
YoY
(C－D)
(D)
Change96.1%+0.4pt
+0.4%
9,343

+37

+0.4%

5. Portfolio NOI
Pre-offering (130 properties)
2018 Simulated

NOI14,2 (JPY million)

NOI13
Sept.
(JPY
million)

Ratio

2019

2018

Cumulative (July-Sept.)
YoY
Change

2019

2018

YoY
ChangeTokyo 23 Wards

6,388

23.5%

382

476

-19.7%

1,286

1,517

-15.2%

Greater Tokyo (ex. Tokyo 23 Wards)

3,568

13.1%

235

256

-8.0%

808

855

-5.5%

Greater Tokyo - Subtotal

9,957

36.6%

618

733

-15.6%

2,094

2,372

-11.7%

Chubu

1,456

5.4%

86

119

-28.0%

327

377-13.2%

Kansai

2,227

8.2%

95

132

-27.9%

386

500-22.8%

Kyushu

1,649

6.1%

66

113

-41.3%

319

396-19.4%

Hokkaido

1,479

5.4%

128

39 +223.9%

591

525

+12.7%

Other domestic

2,181

8.0%

213

207

+2.8%

931

863

+7.9%

Domestic Hotel – Subtotal

18,951

69.7%

1,209

1,346

-10.2%

4,651

5,035

-7.6%

Residential

5,098

18.7%

300

295

+1.8%

899

891

+1.0%

Commercial

368

1.4%

30

31

-1.1%

92

92

+0.2%

Domestic Asset- Subtotal

24,417

89.8%

1,540

1,673

-7.9%

5,644

6,019

-6.2%

Overseas

2,782

10.2%

-18

-47

+62.3%

427

391

+9.4%

Total

27,200100.0%

1,522

1,625

-6.3%

6,072

6,410

-5.3%

Post-offering (148 properties)
2018 Simulated

NOI1,2 (JPY million)

NOI13
Sept.
(JPY
million)

Ratio

2019

2018

Cumulative (July-Sept.)
YoY
Change

2019

2018

YoY
ChangeTokyo 23 Wards

6,450

21.6%

385

482

-20.1%

1,296

1,533

-15.4%

Greater Tokyo (ex. Tokyo 23 Wards)

3,635

12.2%

241

261

-7.7%

827

872

-5.1%

Greater Tokyo - Subtotal

10,086

33.8%

626

743

-15.7%

2,124

2,406

-11.7%

Chubu

2,857

9.6%

184

222

-17.2%

709

767

-7.5%

Kansai

2,227

7.5%

95

132

-27.9%

386

500-22.8%

This English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

4

Kyushu

2,406

8.1%

102

170

-39.8%

604

757-20.2%

Hokkaido

3,179

10.7%

264

60 +339.5%

1,362

1,177

+15.8%

Other domestic

2,363

7.9%

223

221

+0.7%

981

915

+7.2%

Domestic Hotel – Subtotal

23,119

77.5%

1,496

1,551

-3.5%

6,169

6,523

-5.4%

Residential

3,555

11.9%

300

295

+1.8%

899

891

+1.0%

Commercial

368

1.2%

30

31

-1.1%

92

92

+0.2%

Domestic Asset- Subtotal

27,043

90.7%

1,827

1,877

-2.6%

7,162

7,507

-4.6%

Overseas

2,782

9.3%

-18

-47

+62.3%

427

391

+9.4%

Total

29,826100.0%

1,809

1,829

-1.1%

7,590

7,898

-3.9%

(Note 1) Based on all properties held as of the end of September 2019, excluding (i) 9 hotels with fixed-rent lease agreements and(ii) D70 Hotel MyStays Nagoya Nishiki and D75 Hotel MyStays Sapporo Susukino which do not have comparable
performance figure for the previous year. 9 hotels with fixed-rent lease agreements are D29 Super Hotel Shinbashi/
Karasumoriguchi, D33 Comfort Hotel Toyama, D36 Super Hotel Tokyo-JR Tachikawa Kitaguchi, D37 Super Hotel JR
Ueno-iriyaguchi, D39 Comfort Hotel Kurosaki, D40 Comfort Hotel Maebashi, D41 Comfort Hotel Tsubame-Sanjo, D42
Comfort Hotel Kitami, and D48 Takamatsu Tokyu REI Hotel. NOI includes a simulated amount of dividend income from
Kingdom TMK (the “TMK”) that owns Sheraton Grande Tokyo Bay Hotel as an underlying asset. The fiscal periods of
the TMK are semi-annual periods from April 1 to September 30 and from October 1 to March 31 every year, and INV will
receive the dividend within three months from the end of each semi-annual fiscal period of the TMK. Since INV does notreceive a dividend from the TMK on a monthly basis, the amount of dividend INV receives from the TMK for each monthis a simulated figure, which is calculated by deducting (i) simulated expenses such as operating expense of the TMK and
the interest of debt (calculated dividing the budget of the TMK for the fiscal period that includes the relevant month by the
number of months in such fiscal period) from (ii) NOI based on the performance of Sheraton Grande Tokyo Bay Hotel inthe month which is three months before the target month for this performance disclosure and multiplied by INV’s ownership
ratio of the preferred equity interest in the TMK (49.0%). The revenue from the Cayman Hotels is calculated at theexchange rate of US$1 to ¥110, which is the exchange rate fixed by the acquisition of puts and selling calls, covering
approximately 85% of expected cash flow through December 31, 2020. Furthermore, NOI is provisional figure andsubject to change when it is determined at financial closing; hereinafter the same.
(Note 2) NOI figures before acquisition by INV is based on the data obtained from third-parties including previous owners;
hereinafter the same.
(Note 3) Based on 71 domestic hotel properties managed by MyStays Hotel Management Co., Ltd. or its subsidiary、out of the 82
domestic hotel properties held by INV as of the end of September 2019.
(Note 4) Based on 71 hotel properties; of the 82 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, theunderlying asset of preferred equity interest held by INV) held as of the end of July 2019, (i) 9 hotels with fixed-rent leaseagreements and (ii) (D70 Hotel MyStays Nagoya Nishiki and D75 Hotel MyStays Sapporo Susukino which do not havecomparable performance figure for the previous year are excluded.
As for Sheraton Grande Tokyo Bay hotel, NOI isbased on the figure for the month which is three months prior to the target month for this performance disclosure as INV
will receive the dividend from the TMK within three months of each fiscal period end for the TMK as described above.
However, in consideration of seasonality, figures other than NOI in the table above are based on the figures for September
2019; hereinafter the same.
(Note 5) Based on 55 hotel properties; of the 64 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, theunderlying asset of preferred equity interest held by INV) held as of the end of September 2019, 9 hotels with fixed-rentlease agreements are excluded.
(Note 6) Based on 62 properties held as of the beginning of July 2019.
(Note 7) NOI excludes one-off insurance-related revenues and expenses, as well as expenses required to detach trust beneficiaryinterest from an integrated trust account.
(Note 8) “Occupancy Rate” for hotel portfolio is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant period ÷ (aggregate number of rooms during
the relevant period x number of business days during target period)(Note 9) “ADR,” or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by
the total number of sold rooms for the same period.
(Note 10) “RevPAR,” or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate
number of rooms for the same period (rooms x number of days), and is the same as product of room occupancy rate and
ADR.
(Note 11) Gross Revenue of Sheraton Grande Tokyo Bay Hotel used in the table is the whole gross revenue of such hotel, regardlessof INV’s ownership ratio of the preferred equity interest in the TMK (49.0%)

This English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

5(Note 12) Cumulative occupancy rate for residential portfolio is calculated by dividing the sum of total leased area by the sum of total
leasable area at the end of each month and the percentages are rounded to one decimal place. Cumulative rent per
tsubo is calculated by dividing the total rental revenue including common area charges for each month by the sum of total
leasable area at the end of each month.
(Note 13) Based on either (i) 130 properties owned by INV as of the beginning of July 2019, or (ii) 148 properties owned by INV asof the end of July 2019, assuming all properties were owned since the beginning of 2018. Includes the dividends frompreferred equity interest of TMK that owns Sheraton Grande Tokyo Bay Hotel and estimated TK dividend backed by two
Cayman hotels, assuming these dividends contributed throughout the June 2018 fiscal period and the December 2018
fiscal period of INV. Actual results for the pre-acquisition period of the properties acquired in 2018 are based on actual
results provided by sellers. The revenue from the Cayman Hotels is calculated at the exchange rate of US$1 to ¥110,
which is the exchange rate fixed by the acquisition of puts and selling calls, covering approximately 85% of expected cash
flow through December 31, 2020.
(Note 14) Based on properties held as of the beginning of July 2019, excluding 9 hotels with fixed-rent lease agreements.
(Note 15) Percentages are rounded to one decimal place. ADR and RevPAR are rounded to the nearest yen and Gross Revenue isrounded down to the nearest million yen.
(Note 16) For the details of performance for each asset, please visit INV’s website:
https://www.invincible-inv.co.jp/en/portfolio/hotel.html

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on September 25, 2019 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

6